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Sierra Leone Post Ebola Recovery Strategy

Initial Draft

Government of Sierra Leone

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Ministry of Finance and Economic Development

January 2015

Contents

1. Introduction..........................................................................................................................................................................3

1.1. Background..............................................................................................................................................................................3

1.2 Strategy preparation process and structure..............................................................................................................5

2. Economic impact of the Ebola Crisis.............................................................................................................................6

2.1 Impact on economic sectors..............................................................................................................................................7

2.2. Impact on macroeconomic aggregates........................................................................................................................8

3. Social Impact of the Disease.........................................................................................................................................10

4. The Recovery Strategy....................................................................................................................................................12

4.1 Principles guiding the post Ebola recovery strategy...........................................................................................13

4.2 Strategic assumptions.......................................................................................................................................................14

4.3 Medium-term macroeconomic projections ............................................................................................................15

4.4 Social sector recovery strategy.....................................................................................................................................16

4.4.1 Healthcare services.......................................................................................................................................16

4.4.2 Water and sanitation strategy..................................................................................................................17

4.4.3 Education...........................................................................................................................................................17

4.4.4 The vulnerable, social protection and youth employment..........................................................18

4.5 Strategies to recover economic sectors.....................................................................................................................18

4.6 Sub-regional dimension...................................................................................................................................................21

5. Financing the Strategy....................................................................................................................................................22

6. Preconditions for a successful recovery strategy…...………………………………….………………………………..........24

7. Implementation, Monitoring and Evaluation.........................................................................................................25

Towards a Post-Ebola Recovery Strategy for Sierra Leone Page 2

1. Introduction

1.1. Background

Sierra Leone is one of the worst affected West African countries by the Ebola virus disease. The disease was detected in Guinea in February 2014 and spread to Sierra Leone in May of the same year. Since then, over 7,000 Sierra Leoneans have been infected, and thousands have died of the disease. While the epidemic has killed many people, mostly women and children, it is especially worrying that a good proportion of doctors, nurses, and other health personnel are among the fatalities. Children have been orphaned by the disease; schools have remained closed; and over two-thirds of those infected are in the economically active age group. Furthermore, the epidemic has crowded out effective response to other diseases in the national healthcare system, and as a result, non-Ebola illnesses have added to the toll of deaths and suffering. The disease has caused unprecedented social and humanitarian damage, accompanied by severe economic consequences. It has remarkably decreased the impressive gains made in economic growth over the years, as farmers, traders, investors and a range of economic agents have extensively been affected by the epidemic. Key economic activities, including agriculture, mining, manufacturing, construction, trade and commerce, transport, and tourism, have been disrupted, and this has hiked the rate of national unemployment.

Prior to the epidemic shock, the economy of Sierra Leone had recovered remarkably following

the end of the civil war of the 1990s, and was on a trajectory to sustainable development. The

country recorded double digit real GDP growth rates of 15.2 and 20.1 percent in 2012 and 2013,

respectively. This was largely driven by iron ore mining, agriculture, construction, and an

expanded services sector. Macroeconomic stability had been considerably improved: single digit

inflation was recorded, as well as low interest and stable exchange rates and low risk of debt

distress. The country’s performance was encouraging not only on the growth front, but also in

poverty reduction and human development. National poverty headcount dropped from 70 percent

in 2003 to 52 percent before the outbreak of the Ebola virus, and the Human Development Index

(HDI) had increased from 0.329 in 2005 to 0.374 in 2013, ranking the country 183rd out of 187th.

Notable progress had been made in peace consolidation and strengthening of democratic

governance and human rights, and public capacity considerably built to deliver effective and


efficient public services in a transparent and accountable manner. These efforts were manifest in

the peaceful conclusion of the third post-conflict democratic elections of 2012.

The epidemic has reversed all of these achievements, and has left us with awesome challenges as we strive to end this catastrophe. It has wreaked untold havoc on the economic and social fabric of Sierra Leone, weakening the growth prospects of the economy, and causing rapid reversal of gains made in managing macroeconomic stability and improving human development. This has consequently held back government’s efforts at fighting poverty.

We are facing compounded post-Ebola challenges that demand planning now if we are to (i) ensure timely implementation of actions, (ii) expedite socioeconomic recovery and reduction of suffering of masses from the disease, and (iii) speedily chart a course to reclaim the path to sustainable development that Sierra Leone had laid out before the outbreak of the disease. Our recovery strategy is guided and encouraged by the conviction that, while we have been negatively challenged by the Ebola epidemic, there are great opportunities we must not waste time to seize: the opportunity to reflect on what we could have done better to prevent the persistence of the disease in our country; and the opportunity to review our policies and systems now, not only in mainstream health sector, but holistically, so that we can emerge from this disease with a social and economic strengthen that will see us flourish more than ever.

It should be underscored at the outset that the Ebola epidemic is a shock in the middle of implementation of Sierra Leone’s Agenda for Prosperity (A4P) that set’s the basis for the achievement of the country’s Vision 2035. It remains the defining document for the overall development of the country that has been shocked by the epidemic, and is the main national anchor for dealing with the medium to long term challenges posed by the disease. Thus the post Ebola Recovery Strategy will not replicate but build on and strengthen the A4P in light of the following specific objectives:

The recovery strategy will highlight strategies on how to deal with the epidemic shock. Highlight strategies to prevent future health emergencies of this proportion. Highlight strategies towards building robust healthcare system to respond to future

outbreaks of health emergencies. Identify lessons learned from the outbreak towards the need to re-calibrate our

development trajectory and ensure a robust A4P. To identify missed opportunities including the need to strengthen regional cooperation

especially within the Mano River Union States on issues pertaining to health and beyond.


The strategy shall emphasise actions to overcoming the immediate post-Ebola challenges, while highlight medium to longer term ones to be dealt with beyond the recovery phase within the A4P and the drive to achieving our long term development objectives set out in Vision 2035.

1.2 Strategy preparation process and structure

The preparation of the post-Ebola recovery strategy (ERS) draws mainly from the various

analyses that have been carried out on the economic and social impact of the disease by various

institutions. These include assessment by the Ministry of Finance and Economic Development

of the impact of the outbreak on the economy; the Ministry’s various policy documents; strategic

plans submitted by MDAs for FY2015 budget process and MTEF 2015-2017; follow-up

ministerial discussions on the 2015 budget and envisaged strategic priorities post-Ebola; the joint

assessment by the Government of Sierra Leone, the World Bank, African Development Bank,

International Monetary Fund, and the United Nations Country Team; and discussions among

various other stakeholders on strategies to scale up response to the epidemic and way forward to

re-launch the economy and ensure an effective healthcare system and operations in other sectors.

A review of the economic and social impact of the disease is presented in Sections 2 and 3,

respectively. Section 4 then discusses strategies to strengthen the national healthcare system and

other social sectors, as well as strategies to re-launch economic activities to stimulate state

revenue generation and restore viable public investments. Section 5 presents the financing

strategy, while 6 highlights the preconditions for successful implementation of the recovery

strategy. Section 7 presents the implementation, monitoring and evaluation arrangement for the

strategy.


2. Economic impact of the Ebola Crisis

2.1 Impact on economic sectors

Agriculture is one of the worst affected sectors by the epidemic. This is worrying because it employs more than 70 percent of the work force of Sierra Leone and it has been a major anchor for poverty reduction. In the most productive agro-ecological areas, a significant proportion of plots have not been cultivated since the outbreak of the disease in May. The restriction placed on the internal movement of people to contain the disease has prevented cultivation from taking place. Since planting has been delayed, and not taken place in some cases during 2014 agricultural season, rice seeds have been consumed by many farm families due to food shortages.

The mining sector has seen slightly mixed performance following the outbreak of the disease. The African Minerals Ltd exceeded its iron ore production target by 14.7 percent in the first half of 2014, as well as production of ilmenite and zircon by Sierra Rutile, percentage points not reported. However, production targets were not met by other companies during the same period. Iron ore production by London Mining Ltd fell short by 10.2 percent; rutile production by Sierra Rutile fell short by 14.6 percent; bauxite production by Sierra Minerals fell short by 14.2 percent; and diamond production by OCTEA fell short by 17.7 percent.

Construction industry was buoyant prior to the outbreak of the disease, and had been crucial to poverty reduction given its labour intensive nature. It utilized unskilled labour intensively during implementation of public and private investment programmes. The disease has overturned this source of livelihood, in light of the lull in construction activities it has caused. Several road works and other infrastructure construction projects have been suspended, thereby reversing the growth prospects of the economy, heightening unemployment rates, and weakening the revenue generating capacity of the state. Of great concern is the disengagement of young people, which increases risks of social instability for a postwar and fragile state.

The manufacturing sector was picking up and had been instrumental to boosting employment and poverty reduction. Besides its direct impact on employment, it has had indirect impact through backward and forward linkages, bringing together small scale business operators and rural farmers with large businesses within supply/value adding chains. Manufacturing enterprises had consumed intermediate inputs from other sectors in the production of beer, soft drinks, paint,


soap, cement, foam mattresses, and so on, and the vast majority of street vendors have traded in products from the manufacturing sector. Now, most of these income avenues have been brought to a closure due to the disease. Bars, night clubs, cinemas and related activities have been closed down, which, coupled with the lull in construction activities, has resulted in significant drop in demand for locally produced manufactured products.

The recovery of domestic transport from the war had strengthened the manufacturing sector, enhancing development of supply/value chains through strengthening ‘forward and backward linkages,’ and hence the development of small scale enterprises and survival of informal economic operators. International transport had picked up impressively, supporting the revitalization of the tourism sector and private sector development. Now, all of these prospects have been reversed by the disease. Air transport has been particularly hit; until recently, all airlines, with the exception of Air Maroc and Brussels Air, had suspended operations. The frustration of the industry has been compounded by the travel restrictions imposed by countries within West Africa, Africa in general, and from outside Africa. It has hampered cross-border and regional trade thereby reducing supply of essential commodities and exerting upward pressure on the general price level. Air transport disruption frustrates Government efforts at fighting the disease, blocking needed humanitarian assistance abroad from reaching the country including essential medical supplies and staff.

The tourism sector is highly vulnerable to domestic shocks and has been badly devastated by the disease. According to available data from the National Tourist Board, tourist arrivals from abroad dropped by 30 percent in the first eight months of 2014, compared to the same period in 2013 due to Ebola scare. It led to a decline in the number of foreign investors by 46.9 percent. The growth prospects of the hospitality sector have been drastically reduced. Hotels have closed down because of fall in occupancy, and employees laid-off. Some have managed to operate only half-month work force to cushion cost of operations, and on a rotating basis. A lead manufacturing firm, the Sierra Leone Brewery that manufactures drinks and beverages and highly tourism-linked, has put on hold its investment plan and considered closing its facility because of fall in demand for its products. Once this happens, it will lead to loss of about 24,000 jobs related to entertainment industry; and will render 22,500 persons in agriculture without breadwinners due to loss of market for agro-industry inputs.

The epidemic is yet to have extreme impact on electricity generation from the Bumbuna Hydro-Electric Dam, the major supplier of electricity in the country, currently covering Freetown, Makeni City and other towns and villages. The sector has only coincidentally resisted the


epidemic shock because the disease struck at the beginning of the rainy season that increases water levels to support supply of electricity from the Dam. If Ebola ends by the end of 2014 (our optimistic scenario discussed later), we would be hopeful that the Dam’s operations will not be extremely effected. But if the pessimistic scenario prevails, having the epidemic extended into 2015, up to the middle of the upcoming dry season, the Dam’s operations would be significantly affected and this will be catastrophic for the sector. Given high costs of backstopping hydroelectricity generation with thermal plants during dry season, and the current low revenue generating capacity of the government due to low economic activities, with huge funds going towards financing healthcare and Ebola related interventions, coupled with the generally high competition from government institutions for the limited resources, electricity supply can be expected to worsen if Ebola is not contained soon. This will worsen the economy further.

2.2. Impact on macroeconomic aggregates

The disease has worsened the economic outlook for 2014/2015. This outlook is expected to prevail beyond this period until the epidemic is totally contained and sound post-Ebola strategies are implemented. The aggregate effect of the disruptions of economic activities is substantial. The projected economic growth of 11¼ percent of 2014 at the beginning of the year has been revised to 4 percent due to the slowdown in economic activities. The closure of markets, internal travel restrictions and the fear of infection have curtailed food trade and caused supply shortages, leading to general rise in price level (inflation). Data indicate price spikes for staple food, rice, of up to 30 percent countrywide. The annual inflation, which had fallen from 8.2 percent at end-2013, to 6.4 percent at end-April 2014, rose to 7.5 percent at end-August this year, following the outbreak of the disease; and it is expected to rise to 10 percent by end-December 2014, and to go higher in 2015.

The current account deficit is expected to be larger than projected as export growth decelerates, in line with reduced domestic production and increased imports to cover additional needs for medical and emergency food supplies, fuel, and capital equipment for new health centres. Some offsetting impact is expected from lowering imported services, as well as decreased income transfers due to reduced exports. While the capital account is expected to remain broadly unchanged, the overall balance of payments (BOP) is now projected to shift from a surplus of US$46.6 million in 2013, to a deficit of US$206.4 million in 2014, and it is expected to plunge further down to negative US$317.8 in 2015. And between May and August of 2014, exchange rate depreciated by 6 percent in the parallel foreign exchange market.


Government had recorded impressive progress in the financial sector, which was relatively stable in 2013 following effective implementation of the national financial sector development plan (2009). Gains made in this sector have been drastically reduced by the disease due to reduction in the scale of bank and non-bank financial operations. The normal banking hours, for instance, have been considerably reduced in response to measures implemented by government to contain the disease. This affects community banks and financial services associations that have provided rural financial services.

Revenue collection has been adversely affected, due, especially, to decline in mining revenue, and reduction in tax compliance. The revenue shortfall is estimated at Le 390 billion (US$90 million) by the end of 2014, and is projected to plunge further down to Le 932 billion (US$215 million). The resumption of iron ore production has been a key revenue anchor in the last four years, but the recent dive in international iron ore prices has compounded the Ebola impact on the country’s revenue position, which has affected royalty revenues and export earnings.

Unexpected expenditures have increased due to the disease. The cost of the epidemic, which was initially estimated at US$26 million in July 2014, is projected to increase to US$67 million by the end of 2014. Other Ebola-related costs, including outlays on security to enforce quarantine measures and food for quarantined zones are estimated at US$10 million. Estimate of the total impact of the epidemic on the budget is about US$130 million in 2014. The uncovered financing gap for 2014 is estimated at US$28 million. Expenditure pressures are likely to continue in 2015, with social spending and incentive measures for health workers and farmers particularly expected to further increase. The overall financial gap (fiscal and external sectors combined) for Fiscal Year 2015 is estimated at more than US$ 400 million. Initial projected cost of the post-Ebola Recovery Strategy and its financing gap for three-year period 2015-2017 are presented later. The 2015 budget lays the foundation for post Ebola recovery strategy, focusing on the following areas: reviving the economy; strengthening health systems; revitalizing the education sector; supporting recovery of the agriculture sector for food security; improving access to finance; scaling up social protection support; and re-starting infrastructure projects.

Total public debt was estimated at US$1.49 billion by the end of 2013. Government Debt Management policies and strategies over the years have been underpinned by strong macroeconomic stability. However, the current Ebola epidemic, which has impacted negatively on key macroeconomic indicators, poses further challenge to maintaining debt sustainability as originally projected. The drop in domestic revenue and increase in expenditure induced by the


Ebola outbreak in the first couple of months following the outbreak of the disease resulted in huge financing gap in the government budget, and it increased public borrowing from domestic securities market as well as external sources.

In summary, the above disruptions to the economy have posed major challenges to domestic revenue mobilization, private investment, external trade, and implementation of public livelihood programmes. Spending on poverty programmes has been drastically affected, causing huge strain on the already weak healthcare system and fledgling educational and water and sanitation sectors, among others. Vulnerable groups have expanded and are particularly at risk of continued downturn of the economy as the disease continues to spread. The next section provides a summary of social impact of the disease.

3. Social Impact of the Disease

The disease has had devastating impact on the social fabric of Sierra Leone. The following paragraphs present a summary of its effects on the national healthcare system, education, water and sanitation, women and children, the disabled, and its implication for social protection and safety nets.

It has caused a huge loss of gains made in the country’s healthcare services, especially on the flagship Free Healthcare Initiative introduced by government in April 2010 for pregnant women, under-five children, and lactating mothers. Before the epidemic, infant mortality rates had gone down from 128 deaths per 1000 births in 2008, to 92 deaths in 2013. These efforts were against the background of healthcare programmes targeted at eradicating diseases such as malaria, HIV/AIDS, tuberculosis, and others. Sadly, the Ebola virus has diverted substantial attention including public spending from sustaining the fight against these other critical diseases.

It is especially worrisome that the disease has struck a healthcare system that was already weak and those at the highest risk are the nurses, doctors and medical workers who were already in short supply. Before the disease, there were less than 100 trained and practicing midwifes to deliver thousands of births annually; 1,000 trained nurses to serve a six million population; and a doctor to patient ratio of 2 per 100,000 people. The situation has become grimmer with outbreak of the disease. Women and children constitute the majority of the fatalities from the disease, and many others have been widowed and orphaned, respectively. A number of public and private health facilities were closed down following the outbreak of the epidemic, thus the available bed


capacity needed for the treatment of the disease has been extremely overwhelmed by reported cases.

Coping strategies have added to the catastrophe, with Ebola and non-Ebola virus health seekers adopting strategies such as self-prescription, and the concealing of sick housemates due to fear of Ebola related isolation. With these looming contexts, chances of achieving the UN Millennium Development Goals related to child and maternal mortality, and combating HIV/AIDS, malaria and other diseases have been reduced further.

The outbreak has also drastically reduced chances of achieving education related MDGs of promoting universal primary education, and increasing gender equality and empowerment of women. Schools have remained closed since the beginning of the academic year in September following the outbreak, and there are about three million children living in communities affected by the disease. Many of the children are roaming the streets, utilized by parents and guardians to carry out petty trading and other services for household survival.

The disease has compounded the perennial problems encountered by government in the water and sanitation sector. This sector had suffered inadequate and ageing infrastructure, while population had been rising. Efforts by government to reform and increase investment in the sector have been reversed by the current epidemic: some water, sanitation, and hygiene sector experts have been affected by the disease, thereby jeopardizing construction works and service delivery in the sector; and some expatriate staff in the sector have also left the country. This has reduced the country’s chance of achieving the UN MDG relating to access to safe drinking water and sanitation.

The disease has reversed efforts aimed at increasing women empowerment by government. The compounding effects of the disease imply government earlier education support programmes for girl child will substantial require doubling in the post-Ebola Recovery phase. These effects have reduced the chances of achieving the UN MDG relating to promoting gender equality and empowering of women by 2015. And the disease has disrupted the normal development of children. Many have died of the outbreak, orphaning several others. The stigma that accompanied child survivors and orphans has led to increased number of street and stray children.


The elderly in Sierra Leone face heightened poverty and social exclusion because many of them

do not have a pension, and they rely on labour and family members for income. Under the

current epidemic circumstances when breadwinners and benefactors have equally been

devastated by the disease, this vulnerable group has become more challenged for survival. The

situation of the disabled is also grim, having limited strategies to cope with the direct and

indirect effects of the disease. They continue to depend on begging from the street, which not

only exposes them to the disease but their sources of livelihood have also been limited.

The implication of the epidemic for social protection and safety nets is expanding. Before the

outbreak, the depth of national poverty and vulnerability had necessitated huge investment in

social security. With the outbreak of the disease, the need to scale-up investment in this sector

cannot be overemphasized in light of aforementioned impact of the disease: the numbers of

persons sliding into poverty and deeper deprivation is soaring, with children, women, and the

disabled in the direst situation.

4. The Recovery Strategy

The main thrust of this strategy is to put together a framework to ensure speedy recovery of

economic activities, and restore basic social services at the end of the epidemic. While we

acknowledge the huge damage the disease has caused to the socioeconomic fabric of Sierra

Leone, the crisis presents enormous opportunities for us to review the country’s healthcare

system and institute a functional mechanism that will engender a healthcare delivery system that

will robustly respond to any future health emergencies. This will require integrated strategies,

demanding commensurate reforms in other crucial social and economic sectors that have direct

bearing on health outcomes. These sectors include education, water, and environmental

sanitation and hygiene. The areas of information and communication, energy, road infrastructure,

and efficient management of our mineral wealth are also crucial to ensuring sustainable health

systems in Sierra Leone.

Sierra Leone had embarked on the implementation of its third generation poverty reduction

strategy, the Agenda for Prosperity (2013-2018), before the outbreak of the Ebola virus. This

poverty strategy remains government’s overall national development framework that provides

direction towards the achievement of the country’s Vision 2035. Therefore, the Ebola-recovery

strategy (ERS) shall be compatible with the goals set out in the Agenda for Prosperity (A4P).

The ERS is articulated to strengthen and complement strategies in the A4P with special emphasis


on those that have strong focus on building a state-of-the-art healthcare system, and healthcare

supported sectors such as education, water, environmental sanitation and hygiene, information

and communication, energy, mineral wealth, and road infrastructure.

Essentially, the disease provides opportunity to re-calibrate government steps towards achieving

the key objective of Vision 2035 of taking Sierra Leone to a middle income country by 2035.

The current epidemic situation suggests that, achieving this vision will require increased

economic growth that is founded on a strong and resilient healthcare system coupled with

enhancement of other human development dimensions such as education, water, environmental

sanitation and hygiene, and supportive physical and digital infrastructure embedded in a well

developed road system and transport, energy and ICT, as well as efficient management of the

nation’s mineral wealth and domestic and global socioeconomic risks. It is on the back of these,

combined, that we can talk of prosperous economic activities and increased government revenue

generation capacity to finance public investment programmes.

4.1 Principles guiding the post Ebola recovery strategy

Therefore, five principles have been established to guide the preparation and implementation of

the Ebola-recovery strategy:

a. Emphasising Quick Win Strategies: the ERS will particularly place emphasis on the immediate needs of the populations in response to heightened levels of destitution, vulnerability and poverty, while not compromising the need to identify transition strategies addressing medium to long terms priorities.

b. Complementing existing strategies:- The ERS will not replace existing national development frameworks, but will strengthen and complement them to ensure sustained and robust delivery of economic and social services and focus on the general development direction of government as defined in the Agenda for Prosperity and Vision 2035.

c. Integrated response:- The leading priority of this strategy is restoring national healthcare

delivery services and putting in place a solid framework for rebuilding a state-of-the-art

public healthcare system for Sierra Leone that is robust to respond to future outbreak of

health emergencies. But achieving desired health outcomes is absolutely hinged on

achieving desired outcomes in other sectors. Thus, the accompanying priorities include


(i) restoring other social services such as education, water, environmental sanitation and

hygiene; (ii) increasing support for social protection and safety nets; and (iii) restoring

and stimulating economic activities to increase employment and government revenue. d. Sectoral coordination and coherence:- This will be needed more than ever before if the

recovery strategy and road to achieving a better socioeconomic Sierra Leone should be

active and effective; national development planning and coordination has to be

strengthened.e. Enhanced decentralization:- The current epidemic has tested the efficacy of service

delivery at community level, and suggests reviewing decentralization programmes and

redoubling efforts in this direction. f. Speeding implementation of the public service reform programmes:-The Ebola crisis

also suggests that the overall public service delivery system needed enhanced capacity,

on both management, technical, and motivational fronts.

4.2 Strategic assumptions

Since the preparation of the post-Ebola recovery strategy is started before Sierra Leone is declared Ebola-free, we are planning this strategy on two scenarios, which are particularly critical to programming government fiscal and monetary policies over the medium term. These scenarios are the low Ebola scenario, and the high Ebola scenario. The first scenario assumes that the Ebola outbreak is contained relatively quickly, and the disease will be brought under control by the end of 2014 (low Ebola). The second scenario is more pessimistic, and simulates slow-containment of the disease, assuming that efforts to end the crisis will not bear fruits until around the third quarter of 2015 (high Ebola). These assumptions are crucially important to guiding government revenue and expenditure policies, and to determining the medium term implications of these policies for emerging and planned spending on rebuilding robust healthcare system and spending on other critical development areas.

We will therefore start by presenting medium-term revenue/expenditure and other macroeconomic forecasts under the two scenarios, followed by strategies to improve revenue and expenditure situation within the binding constraints imposed by the current epidemic.

4.3 Medium-term macroeconomic projections

Under the assumption that the Ebola outbreak is contained relatively quickly, economic recovery is expected to emerge over the course of 2015, anchored by government spending and sharp


increase in iron ore production after the end of the crisis. Sierra Leone’s overall growth prospects are dominated by the iron-ore subsector. Growth in this fledgling sub-sector continues to be positive even as the epidemic continues to strike; thus a simulated end of the diseases by 2014 will give rise to a sizeable recovery of GDP in the first quarter of 2015. Agricultural growth will fall but will remain positive at 2.0 percent; falling due to effects of missing the planting season of 2014. The services sector will rebound, led by manufacturing and return of tourism and foreign visitors. Under this scenario, non-iron ore GDP rises by 4.5 percent in 2015. Overall GDP rises by 7.7 percent relative to 8.9 percent in the pre-crisis projections, representing a loss of approximately US$59 million.

Under the high Ebola assumption, which projects ending of the disease around the third quarter of 2015, agricultural output is simulated to fall dramatically due to large scale abandonment of farms and mass rural deaths. Food and cash crop production falls, and this necessitates increased imports, thereby exerting upward pressure on inflation and exchange rate. Services also contract, especially in the hospitality sector. Only government spending buoys the economy. The major mines are assumed to close down for at least the first half of 2015. Under this assumption, overall GDP is simulated to contract by 2.0 percent in 2015 and the non-iron ore economy shrink by 3.2 percent. The contraction of the economy is associated with a simulated GDP loss of US$489 million (a loss three times the loss in the low Ebola scenario). The lower growth projection implies lower domestic revenues as income tax and Good and Services Tax decline significantly. Expenditure on Ebola related activities and possible social safety net spending will increase to ease the impact on affected households, but this will lead to wider financing gap in the budget.

Under the high Ebola scenario the economy is projected to recover only by 1.5 percent in 2016. Inflation is projected to rise further to 14.0 percent at end 2015, but to return to single digit in 2016. The current account deficit is projected to widen to 15.7 percent of GDP in 2015 but improve to 9.3 percent of GDP in 2016. Gross foreign exchange reserves will increase to 4.1 months of import cover in 2015, and increase further to 4.2 months of imports in 2016 on account of the expected increase in foreign support.

The following sections will now present the recovery strategies. We will start by outlining strategies to restore effective services in the health sector and initial roadmap to ensuring a state-of-the-art public healthcare system for Sierra Leone. This is followed by strategies for education, water, sanitation, and social protection. We will then present strategies to recover and stimulated economic activities to increase employment and revenue for the state.


4.4 Social sector recovery strategy

4.4.1 Healthcare services

The key objectives are as follows:

a. To ensure that the country’s health system is fully functional following the end of the epidemic so as to effectively play its normal role of responding to all diseases; and

b. To identify measures to ensure a state-of-the-art healthcare system in Sierra Leone that will robustly respond to any recurrence of Ebola and outbreak of any other deadly diseases, and that will generally and sustainably ensure a healthy population that is consistent with long term economic growth and development of Sierra Leone.

The strategies to achieve the above objectives include the following, some of which are immediate, short, and medium to long term:

Carrying out comprehensive assessment of healthcare needs of communities to determine

gaps in geographic coverage of existing health facilities; reviewing the national health

system, plans, policies and strategies; and developing Public Healthcare Master Plan.

Providing new peripheral healthcare units (PHU) and rehabilitating and expanding old ones to narrow distance to facilities, equipping each facility with required bed capacity and other medical equipment to increase response to health emergencies; ensuring that human resources issues are addressed, deploying community health workers in each PHU, and ensuring full staff complement.

Ensuring that every school has first aid medical attention and mainstreaming of

environmental health and hygiene in each school; improving pharmaceutical system, and

expanding medical storage facilities; restoring sanitary (and compound) officials and

inspectors; ensuring the deployment of 1000s of inspectors across the country; and

establishing a Directorate for Environmental Sanitation and Hygiene that is fully

decentralized.

Promoting in-country postgraduate medical education to increase professional man hours in the medical and healthcare system; establishing centre for the control of infectious diseases that is well staffed and equipped; training hundreds of doctors in specialized areas, including pediatricians, dermatologists, eye specialists, and tropical disease


specialists; and training large number of midwives, surgeons, and specialists in non-communicable diseases.

4.4.2 Water and sanitation strategy

The key objectives are as follows: To restore water and sanitation services; and build a state-of-the-art water and sanitation

sector that will effectively support healthcare delivery and economic activities.

To mainstream sanitary issues at all levels, national, regional, district and village level.

The strategies to achieve the above objectives include the following: Mainstream sanitation in schools, introducing hygiene education, nurses and first aid

medical facilities in each school; Introduce and promote sanitation and hygiene inspection in all villages. Repair and construct dams/reservoirs in towns and urban centres; replacing damaged

pipes and mains, and detecting and controlling water leakages along distribution networks to restore and improve access to water in Freetown.

Improving general water supply systems and sanitation facilities in both rural and urban areas; and ensuring that every village has improved and safe source of drinking water, and has water and sanitation management committees.

4.4.3 Education


a. To restore basic education services across the country.

b. To strengthen the school system to ensure that it plays the expected supporting role to other sectors such as healthcare and the functioning of the overall economy.

The strategies to achieve the above objectives include the following:

a. Ensuring the re-opening of schools in every part of the country, and restore and upgrade school feeding programmes.

b. Providing in-service training for teachers, and procuring teaching and learning materials and hygiene supplies.

c. Supporting schools for handicapped children, and paying tuition subsidy for primary school children, examination fees for NPSE, BECE and WASCE pupils.


d. Providing dietary support to boarding schools; and providing conditional cash transfers to poor households to facilitate the schooling of their children; and accelerating the radio/TV education programmes for school pupils.

4.4.4 The vulnerable, social protection and the youth


To restore lost livelihoods to the most vulnerable, low income groups, and the youth.

To build resilience of these groups against future shocks.

The strategies to achieve the above objectives include the following:

Carrying out comprehensive survey to determine persons that have been rendered extremely poor by the Ebola crisis: computing the stock of the vulnerable, orphaned children, the widows, and the aged.

Providing school and other livelihood support to the vulnerable and households mostly affected by the disease especially for children orphaned by the crisis and their mothers; and providing nutritional (food) support to all schools.

Strengthening the function of social officers at district level and supporting their collaboration with local councils; establishing women desk at local councils and chiefdom level.

Increasing financial support towards social protection, health and education; and scaling up donor funded cash transfers and Community Driven Projects implemented by the National Commission for Social Action (NaCSA); and developing more safety nets project proposals to increase geographic coverage of cash transfers across districts.

Promote youth employment support project of NaCSA.

4.5 Strategies to recover economic sectors


a. To re-launch economic activities in the various sectors to stimulate employment and revenue generation.

b. To improve the image of the country to re-gain the confidence of private investors.c. To plan and work towards expanding public infrastructural investment programmes to:


a. meet emerging demand from a planned health sector that is robust to responding to any future health emergencies and addressing the general healthcare needs of the population;

b. meet emerging demand from all socioeconomic sectors that will be directed towards ensuring increased economic growth and sustainable development.

Strategies for restoring and stimulating agricultural and fishery activities: Provide farm inputs such as seeds, planting materials, agricultural implements, fertilizers

and pesticides, and support to tree crop rehabilitation. Organize farmers for rapid cultivation to address post-Ebola food shortages. Improve activities along the value-chain for rice, tubers, ground nut and vegetables; and

operationalise the ABCs through linkages to the Financial Services Associations and community banks.

Develop Inland Valley Swamps (IVS); continue to expand market access through the rehabilitation of feeder roads and farmers market centres including daily and periodic markets; and

Establish Strategic Grain Reserve that will address food emergencies.

Strategies for restoring and stimulating fishery activities: Increase efficiency in the management of fishery/marine resources through strengthening

of systems for controlling fish stocks and regulating catch levels Set up Quota Management System to ensure that licensing of fishing vessels is based on

quantity of fish caught than the current practice of licensing based on the size of fishing vessels.

Strengthen the institutional capacity of the marine sector increase inshore and offshore

patrol Sierra Leone waters to reduce illegal, unreported and unregulated (IUU) fishing.

Promote community based fisheries surveillance for the reduction of IUU fishing.

Scale up support to inland land and artisanal fisheries.

Improve value-added and hygiene conditions in the sector through construction of Fish

Harbor Complex at Murray Town to enhance trade and investment; and establish a well-

equipped Fisheries Observer Agency

Strategies for restoring and stimulating tourism activities:


Re-launching media campaigns to rebrand and improve the image of the country—undertaking robust marketing of the country’s development potentials and attractiveness through the use of international media houses such as CNN and Al-Jazeera.

Increasing beautification of beaches and enforcing sustainable sand mining activities.

Strategies for restoring and strengthening trade and private sector activities: Revive the National Development Bank to support agriculture and small to medium scale

enterprise development. Increase the capacity of the Standards Bureau, and promote inclusive value-chain to

promote small scale businesses. Strengthen the operations of the Sierra Leone Producing Marketing Company, and

support consumer protection activities. Increase the capacity of the professional wing of the Ministry of Trade and Industry

(MTI) and coordination role of MTI of all trade and business matters across the economy; and make SLIEPA more functional and proactive in the promotion of investment and export opportunities.

Facilitate the implementation of local content policy to encourage local business ideas and advancement of local investors.

Encourage the participation of local rice farmers in the institutional feeding programme of government, and promote village and community banking.

Ensure reduction of interest rates to promote agriculture and small scale business operations and the general development of the private sector.

Promote public private partnership in the provision of public services.

Strategies for restoring and strengthening public roads infrastructure programmes: Government will continue with its road infrastructure and other public works

programmes to stimulate the economy and provide jobs especially for the youth. The following are specific activities envisaged during the recovery phase:

o Utilise Road Maintenance Fund Administration to provide funds for the purchase of caterpillar machines (D6), Graders and Rollers for all district councils to ensure periodic maintenance of feeder roads.

o Carry out routine and periodic maintenance of trunk roads, bridges and ferries. o Develop new roads and upgrade existing ones, including feeder roads.

Strategies for strengthening the energy sector Facilitate implementation of pipeline government-donor energy projects, including:


o World Bank supported Energy Access and Energy Sector Utility Reform Projects of US$US$16.0 million and US$40.0 million, respectively;

o the Islamic Development Bank low and medium voltage network improvement project of US$10.0 million; the Japanese International Cooperation Agency T & D lines project of US$14.0 million; and regional interconnection line for which Sierra Leone’s contribution is US$133.7 million.

Implement ECOWAS grant of US$21.8 million to address emergency needs of the National Power Authority.

Facilitate implementation of pipeline projects for the electricity generation under the arrangements with Addax Bio-energy for 15MW and Cooperbelt Enegineering Cooperation for 128MW.

Provide alternative sources of electricity to backup existing power stations in case of mechanical failure and/or lowering of water levels relating to hydroelectric generation. And facilitate the issuance of planned government’s special “Electricity Medium Term Bond” to raise the amount of US$106 million to finance 23 MW power generation and supply and installation of Transmission and Distribution materials in selected rural towns.

Facilitate the disbursement and efficient management of the sum of Le 52 billion currently allocated under the domestic capital budget for emergency energy projects, as well as the disbursement and management of the sum of Le 3.2 billion towards the Energy Ministry under the recurrent budget for institutional and capacity development.

4.6 Sub-regional dimension

The Ebola epidemic has also revealed the consequences of missed opportunities for sub-regional action in a number of areas that could have helped to contain the spread directly, and helped to build a more resilient sub-region. The following are three strategic areas towards putting in place a cooperation strategy on sustainable regional and sub-regional healthcare system and related development areas:

Joint action for disaster control going beyond health hazard, including special protocols at the borders, common PR measures, and joint action for countering the embargo.

Joint development of the border areas as stressed in the Cross-border Security Strategy for the MRU adopted by Heads of States in October 2013.

MRU programmes related to livelihoods in remote areas already outlined in the MRU Strategy for the current three year period – particularly Growth Triangles.


5. Financing the StrategyThe initial cost estimates of Sierra Leone’s post-Ebola Recovery Strategy are presented in Table 1 for the social and economic sectors discussed above. These areas are key priorities requiring substantial post-epidemic investment to recover the economy and plan towards sustainable development. Government’s Budget for Fiscal Year 2015 is crucial to ensuring and accelerating the transition from epidemic to post-epidemic phase, and it is expected to provide impetus for the implementation of the ERS. The initial total cost of the ERS for the period 2015-2017 is US$2.29 billion, and the estimated funding from government, including projected support from development partners for the same medium term period, for the priority areas captured, is US$ 1.04 billion. This leaves an initial post-Ebola financing gap of US$1.25 billion. These estimates shall be revised accordingly as the disease evolves, and will be finalized when the virus is fully contained.


Table 1: Initial Financing Gap for Sierra Leone’s Post-Ebola Recovery Strategy, 2015-2017

(US$ Million)

Priority Sectors Government Budget Initial Ebola Cost Initial Financing Gap

2015 2016 2017 Total 2015 2016 2017 Total 2015 2016 2017 Total

Social

Sectors

Healthcare and sanitation Services 39.86 72.20 94.23 206.29 129.86 167.20 183.23 480.29 90.00 95.00 89.00 274.00

Water Resources 23.60 20.33 22.41 66.33 63.60 65.33 61.41 190.33 40.00 45.00 39.00 124.00

Education Services 40.06 59.12 61.41 160.59 74.06 98.12 94.41 266.59 34.00 39.00 33.00 106.00

The Vulnerable and Social Protection 2.14 12.31 11.24 25.68 49.14 64.31 57.24 170.68 47.00 52.00 46.00 145.00

Youth employment support 1.52 3.71 4.45 9.68 26.52 33.71 28.45 88.68 25.00 30.00 24.00 79.00

Economi

c Sectors

Agriculture and Rural Development 12.24 46.89 50.05 109.18 52.24 91.89 91.05 235.18 40.00 45.00 41.00 126.00

Managing Marine & Mineral Res.

Resources

1.73 3.64 4.05 9.41 25.73 32.64 29.05 87.41 24.00 29.00 25.00 78.00

Trade & Private Sector Development 5.58 8.52 9.46 23.56 35.58 43.52 40.46 119.56 30.00 35.00 31.00 96.00

Roads, Air Transport, ICT 128.87 151.92 139.68 420.46 178.87 206.92 190.68 576.46 50.00 55.00 51.00 156.00

Tourism and Cultural Affairs 1.41 1.56 1.81 4.78 21.41 26.56 22.81 70.78 20.00 25.00 21.00 66.00

Initial Cost Estimates 256.99 380.20 398.7

7

1,035.96 656.99 830.20 798.77 2,285.96 400.00 450.00 400.00 1,250.00

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6. Preconditions for a Successful Recovery StrategyOvercoming the challenges posed by the disease and ensuring the successful implementation of the recovery strategies would require strengthening structural reforms including (i) more effective management of monetary and financial sector policies: the Bank of Sierra Leone will pursue policies to maintain low and stable prices and implement appropriate supervisory measures to ensure financial stability; (ii) enhancement of public financial management reform through the implementation of a medium-term PFM Reform Strategy for the period 2015-2017 under the new Public Financial Management Improvement and Consolidation Project funded jointly by Government and the Multi-Donor Budget Support Partners; (iii) a Project Preparation Fund (PPF) has been established as a demand-responsive facility to finance large and medium scale project preparatory activities: the Fund will facilitate project preparation activities necessary to undertake infrastructure projects from identification through concept design to financial close, including feasibility studies, financial and legal structuring, as well as capital-raising; and (iv) budget execution and project monitoring will be scaled-up through appointment of budget monitors in all the Districts.

The Government is very much aware of the risks facing the implementation of the strategy in light of the growing international crises including financial distresses in donor countries, and international terrorism and related crises. These are expected to reduce donor support to the developing world reinforced by the fact that the competition for these resources is very high. Thus, in addition to the foregoing policies, management of the country’s natural resources and the mobilization of domestic revenues in general will be increased.

Government faces twin crisis. Besides the epidemic catastrophe, the mining sector—major source of foreign exchange—is also undergoing a serious crisis with regard to the suspension of operations of the Africa Minerals Limited in the iron ore sector which was the major driver of the economy in terms of state revenue before the epidemic. Thus, though the mining crisis is not as directly Ebola related but has tremendous implication for Ebola response and sustainability of the recovery strategy. Thus, every effort should be made by the government to restore normal operations in the mining sector owing to the extreme fiscal challenges confronting the state vis-à-vis the unpredictability surrounding external assistance.

7. Implementation, Monitoring and EvaluationThe Ebola epidemic challenges are highly poverty-driven. Thus, they fall within the framework of Sierra Leone’s third generation poverty reduction strategy, the Agenda for Prosperity (2013-

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2018). In this regard, we shall not reinvent the wheel by planning different arrangement for implementation, monitoring and evaluation (M&E) of the post-Ebola recovery strategy. The institutional framework for the implementation, monitoring and evaluation of the Agenda for Prosperity (AfP) will be adjusted accordingly to capture the implementation and M&E for the ERS to discourage establishment of parallel structures. The existing implementation framework for AfP will be modified to capture the role of emerging institutional bodies coordinating national response to the epidemic, among other things.


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